Calcutta High Court
Nicco Corporation Limited vs Oil & Natural Gas Corporation Limited & ... on 22 February, 2010
Author: Patherya
Bench: Patherya
GA No. 393 of 2010
CS NO. 27 OF 2010
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
NICCO CORPORATION LIMITED
Versus
OIL & NATURAL GAS CORPORATION LIMITED & ANR.
For Petitioner : MR. A. MITRA, MR. P. CHATTERJEE, SENIOR ADVOCATES
WITH MR. A. MITRA, MR. J. CHOWDHURY,
MS. R. KAJARIA, ADVOCATES.
For Respondent No.1 : MR. JAYANTA MITRA, SENIOR ADVOCATE WITH
MR. A.K.PODDAR AND MS. A. SHYAM, ADVOCATES.
For Respondent NO.2 : MR. S.B.SARAF, MR. G.N.JAGODIA, ADVOCATES. BEFORE:
The Hon'ble JUSTICE PATHERYA Date : 22nd February, 2010.
The Court : By order dated 12.2.2010 the parties were directed to maintain status quo. Such order is still continuing till this day.
Counsel for the respondent no.1 submits that such order be vacated as the agreement between the parties and the tender conditions, which forms part of this agreement contains a forum selection clause and an 2 arbitration clause. The forum selection clause though may appear uncertain can be made certain under Section 29 of the Contract Act and for such certainty attributed to the forum selection clause the same becomes operative. Paragraphs 266 and 269 from Halsbury's Laws of England, Volume-9, 4th Edition has been relied on for the proposition that in commercial transaction the substance must be looked into and not the form. Similarly, the document as a whole must be looked into and in construing an agreement a Court should not hold a provision to be void for uncertainty unless it can resolve the ambiguity, which it is said to contain. Reliance is also placed on AIR 1976 SC 2257. As the work order was issued in Rajahmundry the Court which will have exclusive jurisdiction is the Court at Rajahmundry. Under clause 48.1 all disputes and differences are to be referred to arbitration. Therefore, this Court, in view of such arbitration clause, has no jurisdiction to entertain the instant suit or pass orders therein. The relief sought is in effect to indirectly obtain stay of the invocation of the bank guarantee. From the various correspondence exchanged it will appear that the petitioner was unable to execute the works nor submit the plan whereunder works would be effected. The respondent, therefore, had no alternative but to issue the letter dated 1.2.2010. In fact, the bank guarantee issued is unconditional and on demand being made is to be honoured in respect of which right could have been exercised that has been forestalled. Hence, the order dated 12.2.2010 be vacated. 3
In reply, counsel for the petitioner, submits that the prayers in the plaint are not only confined to prevention of invocation of bank guarantee. In fact, in the instant case the possibility of uncertainty exists and, therefore, the forum selection clause is void. In fact, the respondents themselves are not sure of the jurisdictional clause as two separate caveats have been filed one in High Court of Andhra Pradesh, Hydrabad and the other in the District Court of Rajahmundry. The intention of the respondents is to abandon the contract. Extensions have been granted as postulated under the relevant clause of the contract only in case of fault on the part of the respondents. As such extensions have been granted, it is evident that the faults can be attributed to the respondents. By issuance of the letter dated 1.2.2010 the respondents fraudulently seek to invoke the bank guarantee. Civil Courts ought to guard its jurisdiction and while doing so the order passed be extended. Reliance is placed on [2002] 3 CHN 138.
Having considered the submissions of the parties, clause 50 of the contract between the parties reads as follows :
"The parties hereby agree that their respective rights, privileges, duties and obligations under the CONTRACT shall be determined under and governed by the laws of India and shall be subject to exclusive jurisdiction of the Indian Courts at the place from where the CONTRACT has been awarded [i.e. RAJAHMUNDRY / HYDERABAD IN ANDHRA PRADESH]."
From a reading of the said clause, it is evident that the place where the contract was awarded was to have exclusive jurisdiction. From a reading 4 of the work order, it goes without saying that the work order was awarded at Rajahmundry. Therefore, it was known to the parties in view of clause 50 that the Court which would have exclusive jurisdiction would be the Court at Rajahmundry. In fact, the caveats lodged are in respect of two separate proceedings. The caveat lodged in Hydrabad is in respect of filing of a writ petition while the caveat lodged in the District Court at Rajahmundry relates to filing of suits. Therefore, it was for two separate proceedings that caveats were lodged. It will not be out of place to mention that writ jurisdiction is the domain of the High Court alone. Therefore, the Courts of Rajahmundry would have no jurisdiction to entertain a writ application and it is only for that limited purpose that it can be said a caveat was lodged in the High Court of Andhra Pradesh namely, Hydrabad. Therefore, the parties when they set out to agree to certain terms and conditions agreed to the forum selection clause mentioned above and are to be bound by it.
The order of status quo dated 12.2.2010 was passed on the basis of the letter dated 12.12.2009. Reply has been given to the said letter on 16.12.2009 wherein it was specifically stated that no work could be resumed at the site after July, 2009 and the said office was wrapped up leaving only a skeleton presence of two of their personnel. This has not been disputed by the petitioner in any of its letters subsequent thereto. Therefore, the respondents may have been within their right to issue the letter dated 1.2.2010 and take such steps as available to it. The interim order passed will disentitle the respondents from taking steps and, in case, it is proved at the 5 final hearing of disputes between the parties that there has been breach of agreement or that the termination is wrongful, the petitioner can claim damages.
For all the reasons aforesaid, the interim order dated 12.2.2010 needs no extension.
Directions are given for filing affidavits. Let affidavit in opposition within three weeks from date; reply thereto, if any, within two weeks thereafter. Matter to appear in the list six weeks hence.
All parties concerned are to act on a photostat signed copy of this order on the usual undertakings.
(PATHERYA, J.) pkd.
Asstt.Registrar[C.R.]